Site Mobile Navigation

Democrats See Perils on Path to Health Cuts

WASHINGTON — As Congress opens a politically charged exploration of ways to pare the deficit, President Obama is expected to seek hundreds of billions of dollars in savings in Medicare and Medicaid, delighting Republicans and dismaying many Democrats who fear that his proposals will become a starting point for bigger cuts in the popular health programs.

The president made clear his intentions in his speech to a joint session of Congress last week when, setting forth a plan to create jobs and revive the economy, he said he disagreed with members of his party “who don’t think we should make any changes at all to Medicare and Medicaid.”

Few Democrats fit that description. But many say that if, as expected, Mr. Obama next week proposes $300 billion to $500 billion of savings over 10 years in entitlement programs, he will provide political cover for a new bipartisan Congressional committee to cut just as much or more.

And, they say, such proposals from the White House will hamstring Democrats who had been hoping to employ Medicare as a potent issue against Republicans in 2012 campaigns after many Congressional Republicans backed a budget that would have substantially altered Medicare by providing future beneficiaries with a subsidy to enroll in private health care plans.

Representative Emanuel Cleaver II, Democrat of Missouri and chairman of the Congressional Black Caucus, said: “Ninety-eight percent of the president’s speech was excellent. The Democratic caucus and the black caucus are fired up. But you will find that we have some differences with the president’s plan as it relates to Medicare and Medicaid. We would rather see some kind of increase in revenue as opposed to cutting these programs.”

By offering such proposals, Mr. Cleaver said, the president “cancels out any bludgeoning that Democrats might give the Republicans over Medicare and Medicaid.”

Health policy experts and lobbyists see the situation in a similar way. Julius W. Hobson Jr., a lobbyist who used to work at the American Medical Association, said he viewed the savings to be proposed by Mr. Obama as “an opening bid, the floor, the foundation for the kind of cuts Republicans want to make.”

Photo

“We have some differences with the president's plan,” said Representative Emanuel Cleaver II, a Democrat.Credit
Joe Skipper/Reuters

“Republicans will give a political answer: the president’s plan is not enough,” Mr. Hobson said. “It may not be enough in their eyes, but they will take it and build on it.”

The prospect of further cuts worries health care providers because it comes on top of the new health care law, which reduced payments to most providers to help offset the cost of extending coverage to millions of uninsured Americans.

While Mr. Obama has signaled a willingness to make health spending a top source of budget savings in the current debate, he has not sent a similar message on Social Security, even though in budget talks with Republicans this year he entertained the idea of changing the way annual increases in payments are calculated. The president did not mention changes to Social Security in his latest speech, a fact that could bolster Democrats who believe they may have a new political opening on that program, given that Gov. Rick Perry of Texas, a top Republican presidential candidate, has attacked the program as a government-sponsored Ponzi scheme.

But Mr. Obama has said that “health care cuts” need to be part of any deal, and he has already given a preview of the cuts he is likely to propose next week. In April, he unveiled a framework for deficit reduction that he said would save $480 billion in Medicare and Medicaid by 2023.

In negotiations with Congressional Republicans in July, Mr. Obama went further. He indicated that he was willing to consider a gradual increase in the age of eligibility for Medicare and cuts in federal payments to states for Medicaid.

An error has occurred. Please try again later.

You are already subscribed to this email.

Medicare and Medicaid account for 23 percent of federal spending this year, and their costs are growing faster than the rest of the budget because of increasing enrollment and medical inflation. Under current law, the Congressional Budget Office says, the two programs will account for 28 percent of federal spending in 2021.

Controlling these costs is a goal for Republicans on the powerful House-Senate committee on deficit reduction, whose proposals are supposed to receive up-or-down votes in both chambers before the end of the year.

“I give the president credit for identifying and recognizing the problem,” Representative Jeb Hensarling, Republican of Texas and co-chairman of the deficit reduction committee, said in an interview. “It’s a very, very hopeful sign that the president would say this — that Medicare and Medicaid are the major drivers of our long-term liabilities, and nothing else comes close.”

By contrast, Representative Frank Pallone Jr. of New Jersey, the senior Democrat on the Health Subcommittee of the Energy and Commerce Committee, is nervous about further health care savings to be proposed by the White House. “Medicare and Medicaid cannot sustain additional cuts, whether in benefits or provider payments,” Mr. Pallone said.

Representative Allyson Y. Schwartz, Democrat of Pennsylvania, said now might not be the best time to consider changes in the health program. “We ought to let the innovations in the new health care law take hold,” Ms. Schwartz said. “They can save significant dollars in the long term by reducing medical errors and complications and improving the quality of care.”

Democrats’ concerns are evident in a list of deficit reduction options circulated in the last few days by Representative Sander M. Levin of Michigan, the senior Democrat on the Ways and Means Committee.

The document criticizes the idea of raising the Medicare eligibility age to 67, from 65, and notes, “This policy idea was floated by the president near the end of the debt ceiling debate” in July. “This policy does nothing to control costs,” the document says; “it simply shifts substantial costs from Medicare to other parts of government and to private and public employers.”

In a separate memorandum, Mr. Levin said Democrats on the Ways and Means Committee would soon have a private meeting to discuss “the case we will make against cuts to entitlement programs.”

Kenneth E. Raske, president of the Greater New York Hospital Association, said that further cuts in the growth of Medicare and Medicaid would not only impair access to care, but also lead to job loss in the health care industry, directly contravening the president’s goal of job creation.

“Health care could be sacrificed in favor of construction jobs,” Mr. Raske said.

Nursing homes and teaching hospitals are making a pre-emptive strike to forestall further cuts in Medicare and Medicaid.

“I understand the need for sacrifice,” says a nurse in a television advertisement run by the American Health Care Association, a trade group for nursing homes. “We’ve given our fair share, and more. As a nurse who cares for her patients, I can tell you another round of deep cuts that target nursing homes simply goes too far.”

A version of this article appears in print on September 14, 2011, on Page A1 of the New York edition with the headline: Democrats See Perils on Path To Health Cuts. Order Reprints|Today's Paper|Subscribe